Supporting local businesses to invest in digital skills across the workforce Briefing July 2022
Connect. Support. Grow.
Introduction Digital skills are hugely important in ensuring economic productivity across the UK. According to Microsoft’s 2021 report, ‘Unlocking the UK’s potential with digital skills’, 69% of UK leaders surveyed believe their organisation had a digital skills gap and 70% expected to experience one going forward. This is further supported by research from the Learning and Work Institute, who in a report titled ‘Disconnected’ outline that digital skills have become essential skills for the modern world of work and further suggest that over nine in ten (92%) businesses say that having a basic level of digital skills is important for employees at their organisation. As Gemma Hulbert, the Chief Data Officer at Gymshark outlined in the Birmingham Economic Review 2021, ‘the demand for digital skills has never been higher,’ meaning even more focus is now required to develop talent in the Midlands. A digital skills gap already exists and is very likely to have significant future implications for the national and local economy. It is highly important that stakeholders across Greater Birmingham and the wider West Midlands work collaboratively to support local businesses to invest in digital skills, ensuring that workforces are equipped for future adoption of new technologies and digitisation. This briefing will outline the importance of digital skills and will highlight the support that is available for businesses looking to invest in digital skills. Why are digital skills important? Vacancies Office for National Statistics (ONS) data shows that in the three months to May 2022 (the latest available data at the time of writing), the UK employment rate stood 0.9% below pre-pandemic levels at 75.6%. Whilst recovery from the pandemic is still ongoing, it is important to note that unemployment has recently declined in the region, from 4.9% in March-May 2020, at the start of the pandemic, to 4.5% in March-May 2022. These figures are important to note when looking at the number of vacancies. ONS figures show that the number of job vacancies nationally rose to a new record of 1,300,000 between March to May 2022, though the rate at which this figure is increasing is now slowing down. The level of vacancies reflects long-standing skills gaps in the UK, which have been exacerbated by the economic impact of the COVID-19 pandemic. It is important to ensure these vacancies are filled to ensure that residents are able to access meaningful employment opportunities, and businesses are able to thrive and grow, furthering productivity within the region. The Chamber’s Q2 2022 Quarterly Business Report found that of the 60% of firms attempting to recruit in Q2 2022, 76% experienced difficulties doing so. An Employer Skills Survey carried out by the WMCA in 2020 highlighted the strong demand by employers for increasingly necessary digital and analytical skills. To meet this demand, 49% of employers in the Greater Birmingham & Solihull Local Enterprise Partnership (LEP) geography anticipate that digital skills will need enhancing in the future (along with 55% of employers in the Black Country, and 47% in the Coventry & Warwickshire LEP area). Indeed, this makes clear the demand for continuous improvement in digital skills and highlights the need to ensure a strong supply of skills within the region as it can be anticipated that the demand by businesses for digital skills will only increase. Economy There are huge economic benefits in tackling the digital skills gap. Government figures show that the cost of the digital skills gap to the UK economy is currently £63 billion per year in lost potential gross domestic product (GDP), and this is expected to increase. It’s important the region is proactive in reducing the severity of the digital skills gap. In the WMCA’s Industrial Strategy, its outlined that the
West Midlands is uniquely placed to take advantage of emerging technologies such as AI, Automation, Cyber Security and Machine learning, and the strategy notes how the West Midlands is a testbed for business innovation; these areas present significant opportunities for the Greater Birmingham region, and will require a digitally skilled workforce. Government figures make immensely clear the value of the digital sector in the region, highlighting that the West Midlands is on track to create an extra 52,000 digital tech jobs and grow the economy by £2.7 billion, by 2025. Forecasts indicate that The West Midlands Combined Authority Area (represented by the coverage of the 3 Local Enterprise Partnerships) needs to close a growth gap of £3.9bn by 2030 to be the best performing UK region outside of London (as it was between 2010-2019), with a total growth gap of £6.7bn to match London’s growth performance. A series of growth clusters have been identified by the WMCA to drive productivity and job creation across sectors such as aerospace, health technology, manufacturing electric light vehicles, logistics & distribution, professional & financial services, manufacture of future housing and modern & low carbon utilities. The cross-cutting trend which features across all these sectors is digital transformation. The region will require a digitally upskilled workforce to maximise opportunities associated with digital transformation across all of these sectors. The Tech Nation Report 2021 shows how UK is an extremely attractive place to international investors with 63% of investment into UK tech coming from overseas in 2020, up from 50% in 2016. The report further notes how the rate of tech GVA contribution to the UK economy has grown on average by around 7% per year since 2016. With the Commonwealth games coming to the region, and the progress made with HS2, it is vitally important that Greater Birmingham takes advantage of its current standing and draws investment. Showcasing the region’s commitment to the development of digital skills, and our thriving digital sector, could be hugely beneficial in selling the region to the investors. What support is available for businesses looking to invest in digital skills? There is a range of support available to both employers and individuals looking to upskill and develop digital skills. Some examples include: • • • • •
T-Levels- offer students practical and knowledge-based learning at a school or college and experience through an industry placement of at least 315 hours. Sector-based Work Academy Programmes- help prepare unemployed for work. Apprenticeships- formal vocational training WMCA Digital bootcamps- Fully funded courses for skills required in a digital world. Free short courses
Digital T Levels Digital T Levels are 2-year courses which are taken after GCSEs and are broadly equivalent in size to 3 A Levels they offer new routes to employment or further learning for young people looking to begin a career in the digital sector. These courses have been developed in collaboration with employers and education providers so content meets the needs of industry preparing students for entry into skilled employment, an apprenticeship or related technical study through further or higher education. •
Length: Each two year T Level course includes a 45-day industry placement (click here for delivery guidance).
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Funding: T Level Industry Placement Employer Incentive Fund, of £1000, means a separate funding stream available to eligible providers for distribution to Employers who deliver a T Level Industry Placement which starts between 27 May 2021 and 31 July 2022. Apply: Training providers, such as Chamber Patrons South and City College Birmingham (SCCB; click here) and University College Birmingham (UCB; click here) will be able to help you recruit the right student, plan and set objectives for the placement and deal with necessary paperwork.
Sector-based Work Academy Programmes Sector-based work academies help prepare those receiving unemployment benefits to apply for jobs in a different area of work. Placements are designed to help meet immediate and future recruitment needs as well as to recruit a workforce with the right skills. SWAP is administered by Jobcentre Plus. • • •
Length: A sector-based work academy can last up to 6 weeks. Placements have 3 main components- pre-employment training, work experience placement, a guaranteed job interview. Funding: In England, SWAP training is fully funded through the Education and Skills Funding Agency (ESFA) and delivered by further education colleges and training providers. training and administration costs are covered by government funding. Apply: If you are interested in offering a sector-based work academy, or would like further information about the services available to support your recruitment needs, please contact the Employer Services Line on 0800 169 0178. They can offer advice and will be able to put you in touch with a local Jobcentre Plus employer team.
Apprenticeships Apprenticeships are a means of formal vocational training, whereby an apprentice gains recognised qualifications and essential skills alongside working and earning a wage. Apprenticeships – including many in digital and technology focussed subject areas - are available to anyone over the age of 16, and range from level 2 to level 7 (equivalent to a master’s degree). Employers of any size and sector can take on an apprentice. • •
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Length: An apprenticeship typically lasts 1-5 years and includes 20% off the job training, delivered by a training provider. Funding: The Government has introduced a £1,000 payment for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan – where that applies. Employers with a paybill below £3million who don’t pay the apprenticeship levy may be able to access the West Midlands Combined Authority (WMCA) Apprenticeship Levy Fund (click here) through their training provider to cover their 5% co-investment in an apprentice’s training cost. Employers who do pay the apprenticeship levy can use this levy to pay for their co-investment in an apprentice’s training. Apply: A training provider such as Chamber Patrons, Aston University (click here), Birmingham City University (click here), SCCB (click here) or University College Birmingham (UCB; click here) and the University of Birmingham (click here) can support you in recruiting an apprentice or degree/master’s level apprentice (or enrolling an existing staff member on an apprenticeship) and taking advantage of appropriate government support.
WMCA Digital Bootcamps Digital Bootcamps are short courses designed to prepare businesses or individuals with knowledge and skills needed in an increasingly digital world. The focus of the Digital Bootcamps is to help
unemployed, economically inactive and career change residents in the WMCA area access digital roles. • • • •
Length: 11 – 16-week bootcamp, with a minimum of 25 guided learning hours per week. Funding: Fully funded by the WMCA Eligibility: Individuals who are aged 19 or above and a UK resident. Businesses are eligible if able to identify a gap in the digital skills of the workforce. Apply: The WMCA has a list of providers.
Free short courses There are a range of free short courses available for employees from various training providers, as well as organisations such as Microsoft, Lloyds and Google. Microsoft Outlook Training •
Individuals can learn how to send an email, book a meeting, manage a calendar and organise a to-do list. This training is self-paced and total study time is under 4 hours.
Lloyds: learn for Life •
This training provides resources to help with digital skills, organisation and finance. It includes learning how to use office programs like Word and work with digital devices. This training is self-paced and total study time is under 4 hours.
Google Digital Garage •
There are a variety of free courses available through Google Digital Garage to support the development of digital skills. An example of a course includes Connect and Collaborate from Anywhere with Digital Tools - this course is 1 hour and is free. Some courses come with certification.
Additionally, individuals looking to boost their digital skills can access a range of free courses from regional providers such as Adult Education Services and courses as part of Skills for Life. Adult Education Services • •
There are a variety courses available via Adult Education Services. Services and availability of courses depend on geographical area. Essential Digital Skills qualifications are available free of cost if participants have not previously achieved an IT qualification at that level or above.
Free Courses for Jobs as part of the Government’s Skills for Life Initiative •
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Individuals can choose from over 400 free courses to help them enhance their skills. Available to adults who are unemployed, earn below the National Living Wage annually (£18,525), or do not already have a level 3 qualification. These courses for individuals aged 19+. Courses are free and the duration varies from a few weeks to a year.
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There are a variety of training providers and colleges across the West Midlands and Birmingham who provide free level 3 qualifications to eligible adults, including Chamber Patrons University College Birmingham and South and City College Birmingham. Providers can be found here.
What is the Greater Birmingham Chamber of Commerce’s position on digital Skills? With vacancies at an all-time high, and businesses already reporting digital skills gaps, it is vitally important to recognise the importance of digital skills both now and for the future. The ongoing transformation of the economic landscape means an even greater percentage of firms are embracing new technologies in order to raise productivity levels. The Chamber is proud to work with Universities, Colleges and training providers across the region who are actively up- and re- skilling talented individuals to meet the needs of the local economy and participate in the West Midlands labour market. The Chamber believes it is vitally important that the Government continues to provide support to individuals, businesses and educators, to ensure that businesses can take advantage of the opportunities associated with new technologies and digitisation, driving economic growth and establishing a globally dominant tech sector, and that individuals are able to access the employment opportunities associated with this. • •
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The Government must look to tackle the youth unemployment rate and propose policy measures that offer young people experience and opportunities, to develop the digital skills employers require. The Government must ensure that training and education infrastructure, both for young and adult learners, is properly funded to deliver the digital skills employers need. Digital infrastructure is a key component of the emerging digital economy, to have inadequate infrastructure would see digital skills become outdated and vacancies increase. The Government must collaborate with local stakeholders, education providers and business representative organisations to investigate and address the strong demand by West Midlands employers for increasingly necessary digital and analytical skills. The Government and local stakeholders must take a proactive and consistent approach to sharing clear information on the current initiatives and support mechanisms available to businesses when it comes to recruiting and up-skilling local talent. The Government must create the conditions for employers to invest in workforce skills by using the tax system to help firms achieve a fast return on investment and ensuring that the skills system has the ability to respond quickly to the evolving needs of industry sectors. This may need to include provision of funding for modular, accredited short courses – alongside formal, longer qualifications.
The Chamber feels businesses in Greater Birmingham possess the tools to thrive in an expanding technology sector. The region has seen significant investment into infrastructure, putting it in a strong place to compete with other regions. However more investment is clearly needed in skills. It is clear, the future is digital. Ensuring skills match demand must be a priority for the Government. How can the Chamber support businesses across Greater Birmingham looking to invest in digital skills? This briefing is part of the Chamber’s Future in Technology (FIT) campaign, which aims to support business investment in digitisation and the adoption of new technologies. Click here for further
information on FIT. The campaign will feature the publication of a range of briefing papers and expert videos on topics including the Government’s Digital Strategy and what it means for businesses, investment in digital infrastructure in Greater Birmingham, cyber security and more. The Chamber has a variety of support options available to assist businesses. The Chamber’s ChamberLink Daily e-newsletter goes out to 14,000 business contacts across the region daily, providing the latest local business news, insights and tips that are of significant value to businesses. The GBCC Policy Team exists to research business views on economic indicators and key challenges they are facing, inform businesses of new policy or legislative changes which may impact them, facilitate the sharing of best practice ideas between local organisations, and engage stakeholders on issues faced by the business community in order to shape effective policy decision making. Resources produced by the team include this briefing, as part of the Future in Technology campaign, as well as briefings on topics such as International Trade, Sustainability and Skills . The GBCC are also part of a WMCA-area bid to deliver a Local Skills Improvement Plan (LSIP) on behalf of the Department for Education and have proposed that this focusses on digital skills. To ensure that you receive further information and updates on local digital skills provision as soon as they are available – as well as updates on the broader work of the Chamber and its members register to receive the ChamberLink Daily Enewsletter here.
For more information, please contact: Kuranpal Singh K.Singh@birmingham-chamber.com Greater Birmingham Chambers of Commerce
About the Greater Birmingham Chambers of Commerce We have been in business, for business since 1813. Today’s GBCC exists to connect, support and grow local businesses. We offer an array of services and initiatives to businesses across six geographical regions and four themed divisions from our wide range of events, international trade services, policy and marketing campaigns, to networking opportunities and media exposure, the Chamber has something for business.